Added value

Added value in financial analysis of shares is to be distinguished from value added. Used as a measure of shareholder value, calculated using the formula:

:Added Value = Sales - Purchases - Labour Costs - Capital Costs

Added Value can also be defined as the difference between a particular product's final selling price and the direct and indirect input used in making that particular product.

The difference is profit for the firm and its shareholders after all the costs and taxes owed by the business have been paid for that financial year. Value added or any related measure may help investors decide if this a business that is worthwhile investing on, or that there are other and better opportunities (fixed deposits, debentures).

For other consultancy measures for shareholder value, see

*Economic Value Added
*Market value added.

References

*Kay, J. (1993) "Foundations of Corporate Success", Oxford: Oxford University Press.


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Look at other dictionaries:

  • added value — ➔ value1 * * * added value UK US noun [U] (also value added) ► ECONOMICS an increase in the value of a resource, product, or service as the result of a particular process: »They want as much of the added value as possible from their exploited… …   Financial and business terms

  • added value — /ˌædɪd vælju:/ noun an amount added to the value of a product or service, being the difference between its cost and the amount received when it is sold. Wages, taxes, etc. are deducted from the added value to give the profit. ⇒ Value Added Tax …   Marketing dictionary in english

  • added value — /ˌædɪd vælju:/ noun an amount added to the value of a product or service, equal to the difference between its cost and the amount received when it is sold. Wages, taxes, etc. are deducted from the added value to give the profit. ⇒ Value Added Tax …   Dictionary of banking and finance

  • added value — N UNCOUNT In marketing, added value is something which makes a product more appealing to customers …   English dictionary

  • added value — additional value, additional worth, worth which has been added on …   English contemporary dictionary

  • added value — noun another term for value added …   English new terms dictionary

  • added value — See value added …   Big dictionary of business and management

  • added value — /ædəd ˈvælju/ (say aduhd valyooh) noun something added to a product or process which increases its value …   Australian English dictionary

  • added value — 1. Mktg an increase in the attractiveness to customers of a product or a service achieved by adding something to it 2. Gen Mgt see value added …   The ultimate business dictionary

  • added value — noun : value added …   Useful english dictionary


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